Bad Faith Lawsuits


Bad faith is generally applicable to commercial contract law and is more a function of damages rather than a separate cause of action. Insurance bad faith is a common example, where the insurance company has a contractual duty to defend or pay and they wrongfully fail or refuse. That gives rise to an insurance bad faith claim. Bad faith claims also arise in the context of discrimination claims. In both examples, the bad faith claim creates a potential for punitive damages to be awarded. There is no separate action for bad faith alone; it is attached to another cause of action.